"NeoGenomics' fourth quarter performance was very good and we are especially pleased with the underlying growth momentum in our business," said Douglas VanOort, the company's chairman and CEO, in a conference call with analysts Wednesday.

The latest results were boosted by a one-time gain of $3.1 million due to the passage of the federal Tax Cuts and Jobs Act in December, which cut the corporate tax rate from 35 percent to 21 percent.

NeoGenomics earned 3 cents a share in the fourth quarter of 2017. That compared to a loss of 18 cents a share a year ago.

Year ago results included a $3.9 million charge associated with refinancing the company's bank debt, and another one-time charge of $3.5 million tied to certain intangible assets.

Gross margin improved in the fourth quarter of last year, driven by productivity gains and cost efficiencies that resulted in an 11 percent reduction in the company's average cost per test sold.

Revenue for the company's core tests rose nearly 17 percent in the quarter, when compared to a year ago. VanOort attributed the increase to the company's sales teams getting back to their former levels of productivity and winning back market share after many months of focusing on retaining customers from the purchase of rival Clarient.

"Our strategy to offer a 'one-stop shop' for all oncology testing needs is paying off, as new clients are requesting many tests in our comprehensive service offering," VanOort said.

The company's overall customer retention rate was 97.5 percent in 2017. Nearly half of its lost customers were due to NeoGenomics' decision not to provide services, or to a customer's retirement or acquisition, VanOort said.

"Even one customer loss is unacceptable to us, and our teams are working to get those few lost clients back," he said.

NeoGenomics handles cancer testing for pathologists, clinicians, oncologists and hospitals throughout the country. It has labs in several states, including Tennessee, Texas and Florida. One of its labs is at its headquarters in Fort Myers.

The company opened its first European lab in November, just outside Geneva, Switzerland. It's building a new lab in Houston, Texas, to replace an older one that came with its acquisition of Clarient, and will add a small satellite lab in Atlanta, Georgia to speed up turnaround for its flow cytometry testing in that area, which is done to diagnose leukemias and lymphomas.

The company's newer pharmaceutical division continues to show strong momentum, with drug companies and others increasingly seeking the company's biopharmaceutical and clinical trial services for new cancer treatments and therapies.

Revenue in the pharmaceutical division grew nearly 69 percent year-over-year in the fourth quarter to $8.7 million — and a record $18 million in new contracts were signed in the quarter.

"Although revenue conversion can be uneven from quarter to quarter, we're pleased to have had many projects convert to revenue in Quarter 4," VanOort said. "Our backlog of signed contracts increased once again and ended the year 81 percent higher than last year."

In a research note, Kevin Ellich, an analyst with Craig-Hallum Capital Group LLC, described the fourth quarter results as a "strong finish to 2017."

"Already showing rapid growth in clinical genetic testing volume and its
biopharma services business, it is clear exiting Q4 that (NeoGenomics) is going on the offensive, investing in its business targeting continued growth and share gains," he wrote. "The company has put the issues that dogged Q3 results and the Clarient
integration to rest."

Ellich has a buy rating on the company's stock, with a price target of $12.

Shares closed at $8.08 on Wednesday, up 72 cents, on Nasdaq.

NeoGenomics faced billing problems last year that led to elevated levels of bad debt. Bad debt expense increased by $6.8 million to $18.6 million, or 7.2 percent of total revenue. Half the increase was attributed to the integration of Clarient, and bad debt is expected to decline this year.

The company and its industry continue to face challenges, VanOort said, including Medicare's new payment system for lab tests and reduced rates for reimbursement.

NeoGenomics also issued financial guidance for 2018 on Wednesday. It expects revenue of $260 million to $272 million and adjusted earnings of 15 to 20 cents a share for the year.

The company will continue to focus on building a world-class culture, on providing uncompromising quality services to its clients and on growth, VanOort said.

"We are aggressively pursuing our growth opportunities," he said. "We remain confident in our ability to grow and to build an even more exciting business."